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Unjustified Threats: Changes to UK Intellectual Property Law

CHANGES TO SECTION 70 UKPA 1977

The planned changes to Section 70 of the UK Patents Act 1977 look to clarify the existing law surrounding threats, ensure adequate protection for more vulnerable businesses and end the tactic of suing legal representatives. Furthermore, the law is set to bring consistency across many IP rights, including registered trade marks and registered designs.

When is a Threat Actionable?

In determining whether a threat has been made, the following question
should be asked:-

Would a reasonable person in the shoes of the recipient understand from the
communication that a patent exists and that legal action is intended for an
act done in the UK?

If the answer to that question is 'yes', then it constitutes a threat of
infringement proceedings.

Nevertheless, such a threat may not be actionable under the law merely
because it constitutes a threat. For example, threats made to a
manufacturer or importer of an allegedly infringing article, or threats
made about the act of manufacture or importation, are not considered to be
actionable.

Under new Section 70A UKPA 1977, a threat may still be actionable by any
party aggrieved, but the scope has been broadened to cover intended acts as
well as acts already done.

Permitted Communications

Under new Section 70B UKPA 1977, a communication to a secondary actor is
permitted if the relevant information it contains is "necessary" for that
purpose, the person reasonably believes the information to be true and the
communication is made for a "permitted purpose".

The permitted purposes are (1) giving notice that a patent exists, (2)
discovering by whom or whether a patent is infringed by a primary act, and
(3) giving notice that a person has a right, where another person's
awareness of that right is relevant. Nevertheless, the Court will have
permission to treat another purpose as permitted if it considers it in the
interests of justice to do so.

The "necessary" information for the purpose should include a statement that
the patent exists, accurate details of the patent and information enabling
relevant products and processes to be identified.

Remedies and Defences

The remedies available for an unjustified threat remain unchanged and
include a declaration that the threat is unjustified, damages and an
injunction.

New Section 70C UKPA 1977 does, however, remove the previously available
defence that the defendant had reasonable belief in the validity of an
otherwise invalid patent.

Nevertheless, despite an explicit threat to a secondary actor never being
permitted, available defences include (1) the infringement of a patent and
(2) approaching a secondary actor because "reasonable steps" had been made
to find the primary actor but had failed (NB any communication must inform
the recipient of these steps).

The new wording "reasonable steps" replaces the old wording "best
endeavours" and likely lowers the bar as to the extremes the patentee must
go to in order to find the primary actor.

Legal Representatives

Under new Section 70D UKPA 1977, a regulated legal advisor cannot be sued
for making threats provided they are (1) acting on instructions of another
person, and (2) identify that other person in any communication.

The burden of proof lies with the advisor to prove that those two
conditions were met at the time the threat was made.

Other IP Rights

Similar provisions to the above have also been implemented in respect of
trade mark and design law.

Amendment to the law of unjustified threats arguably has a greater impact
on trade mark and design law. This is because there was previously no
distinction between primary and secondary actors / acts

Conclusion

The Intellectual Property (Unjustified Threats) Act 2017 was given Royal
Assent on 27 April 2017 and is now an Act of law. A Commencement Order is
required to be made for the Act's measures to be brought into force. The
Commencement Order is likely to have a date of 1 October 2017.

Generally, the reforms are a welcome update to the law on unjustified
threats. Nevertheless, as outlined above, the new law set out to ensure
adequate protection for more vulnerable businesses, e.g. small entities. It
is arguable whether this has actually been achieved, since small
manufacturers / importers remain highly vulnerable targets, whilst large
retailers with dominant market positions enjoy the protection awarded to
secondary actors.